Solar panel demand in Dubai dampened by red tape
Homeowners in Dubai need more incentives and fewer obstacles to encourage them to install solar rooftop panels, say experts.
“We have to make it a lot easier,” said Simon Brennan of the solar contracting company SES Solar, speaking at an IHC sustainability round table event held at Curtin University’s Dubai campus on Tuesday. “We have to relax the NOCs [no objection certificates] and the permits to a certain degree.
“I know that’s probably not going to happen, but if [Dubai] wants solar panels on every property by 2030, something has to change.”
Until last year, Mr Brennan sold solar rooftop systems in the United Kingdom and said they would typically take about three weeks to install.
“It takes three months here, pretty much, from point of sale to installation. And six to eight weeks of that is NOCs – Dubai Municipality, the master developer, design approval from Dewa [Dubai Electricity and Water Authority] and then you have your sub-developers for gate passes into the community.”
He argued that added cost, time and hassle to a process where investors already have to wait several years until they receive a return on investment.
“That really doesn’t give customers the enthusiasm, and I suppose it doesn’t give them the drive to want to change, because it’s quite difficult to change,” said Mr Brennan.
SES Solar is one of more than 50 contractors that have been approved by Dewa to install solar panels on domestic and commercial property rooftops under the Shams Dubai initiative launched in 2015. Through the initiative, Dewa offers net metering to customers allowing them to offset the value of solar energy generated against their power bills.
Mr Brennan argued that the market would be better served if Dubai Municipality and master developers set up their own dedicated teams for handling solar installation applications. This “would speed the process up and give customers more confidence”, he said.
“Nobody wants to order something and wait for three months before it is installed.”
Scott Coombes, a director of the Dubai building consultancy firm AESG, said another issue faced by homeowners who want to install panels is a general lack of financing options, which he said also affected those looking at a wider retrofit of older homes.
“The funding options are not available yet. That’s one of the biggest challenges I’ve seen with the existing building market. There’s 125,000 existing buildings in Dubai. That’s the majority of our energy consumption in Dubai. How do we address that before we start to focus on new builds?”
Zander Muego, a director of the cost consultancy firm Thomas & Adamson, said: “It’s still very difficult to make the business case for retrofitting to stack up.
People look for very aggressive payback periods when it comes to investing in this market, generally. Maybe in western Europe if you looked at a return on your investment of 7 per cent or 5 per cent people would say that is reasonable. Over here, they’re not really interested in that. They want much higher yields.”
Alex Davies, the managing director of the facilities management company Emrill, said investors “will not accept a payback [period] longer than five years” for a return on their investment in retrofitting buildings.
“Even if you say five years, a lot of people raise their eyebrows and say, ‘How long?’”
He added that in some cases fixed agreements mean building owners can find penalties imposed on them if they cut demand for cooling.
“There’s an anti-incentive to reduce things like HVAC/cooling consumption within certain buildings and certain districts. It’s a very difficult balance to get right,” Mr Davies said.
“It can work. There are incentives there and there is a margin to be made in it, but it’s very, very difficult to get right and it is still an emerging market.”
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Updated: May 17, 2017 04:00 AM